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A.I.G. Planning $165 Million in Bonuses After Huge Bailout

jujuman13 said:
As I understand the situation, AIG is paying 'bonus's' already contracted for 2008, it is a legal requirement that these be paid.
I have read that the top six executives currently running AIG have refused to accept these 2008 Bonus's.
It is also my understanding that 2009 Bonus's will be decided at a later date.
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And do those legal contracts make any reference to profits or performance? Do those legal contracts make reference to receiving bonuses when a company receives bailouts?

Just because the requirement exists under contract law does not mean that the right cannot be abrogated by statute or alternately, contract law jurisprudence may develop and state that performance of such contractual obligations, when a company has received huge bailouts is contrary to public policy. The rule of law has a habit of adapting to the repugnant, unsavory and inequitable. Anyone remember contract law in relation to killing a person, or how about privity in relation to the enforcement of third parties indemnity cover?.......
 
;)
rhinefire said:
Didn't Obammy put a ceiling on bank CEO's salaries to the tune of $500,000?
So how does he not go after this with both sleeves rolled up? Is there anyone out there that believes the democrats did NOT know this was coming after dumping bilions of our tax dollars on these gangsters? Obammy has two faces andlike his buddy Biden will say anything to make himself look good. Recall, he got elected because of what he "said" not becasue of his achievements.
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I've not paid real close attentioin to this but I don't think AIG is a bank. They are an insurance company. I believe some of their units insure a lot of home mortgages and other bank products.

The government has declared them too big to fail. If that is true, the government is going to have to keep throwing money at them no matter what they do. ;)
 
Australianlibertarian said:
And do those legal contracts make any reference to profits or performance? Do those legal contracts make reference to receiving bonuses when a company receives bailouts?

Just because the requirement exists under contract law does not mean that the right cannot be abrogated by statute or alternately, contract law jurisprudence may develop and state that performance of such contractual obligations, when a company has received huge bailouts is contrary to public policy. The rule of law has a habit of adapting to the repugnant, unsavory and inequitable. Anyone remember contract law in relation to killing a person, or how about privity in relation to the enforcement of third parties indemnity cover?.......
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You might want to take a look at the the US Constitution. I think there is something in there about making a law to cover past events. ;)
 
Australianlibertarian said:
And do those legal contracts make any reference to profits or performance? Do those legal contracts make reference to receiving bonuses when a company receives bailouts?
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See, this is what gets me. I was always under the presumption that workers got bonuses for doing a good job. Since when does incompetence justify a bonus? In a normal world, I would think there should be some contractual reference to success, but it does seems that they are automatically awarded no matter how poorly they are performing.
 
Middleground said:
See, this is what gets me. I was always under the presumption that workers got bonuses for doing a good job. Since when does incompetence justify a bonus? In a normal world, I would think there should be some contractual reference to success, but it does seems that they are automatically awarded no matter how poorly they are performing.
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If you are still talking about AIG, you might want to check out who got the bonuses and the reason they were given. ;)
 
A.I.G. has also enabled backdoor bailouts.

AIG: $90 Billion Bailout Funds Went To Foreign, Domestic Banks, Including Some Bailout Recipients
Some of the biggest recipients of the AIG money were Goldman Sachs at $12.9 billion, and three European banks _ France's Societe Generale at $11.9 billion, Germany's Deutsche Bank at $11.8 billion, and Britain's Barclays PLC at $8.5 billion. Merrill Lynch, which also is undergoing federal scrutiny of its bonus plans, received $6.8 billion as of Dec. 31.
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All you have to do is replace the word "stimulus handout" with "nationalization bribe" and it all starts to make sense.
 
donsutherland1 said:
From today's edition of The New York Times

http://www.nytimes.com/2009/03/15/business/15AIG.html

Several points are in order:

1. Without taxpayer money, AIG would be insolvent. The company lacked the funds to make the bonus payments. Under such circumstances, there typically are legal avenues to delay or reduce such payments.

2. Even as it seems reluctant to do so, the federal government should take steps to claw back the money that amounts to a misappropriation of taxpayer funding.

3. Mr. Liddy's argument about seeking to retain the "best and the brightest talent" fails on two grounds. First, in the deep recession, financial services jobs at all levels are disappearing. It is not very likely that most of those the payments are aimed at "retaining" would be likely to depart in the current environment. Second, it is highly questionable (to be kind) that the individuals who transformed the company into a giant hedge fund are anything close to the "best and the brightest talent" in the field unless "success" is measured by the size of the financial hole they created.

4. A carving out of the company's viable insurance business and auctioning of it to a viable insurance company and orderly dissolution of all of the firm's non-viable operations remains preferable to continuing to feed taxpayer funds into the company, some of which are now being misappropriated.
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How amusing; Barney Franks (aka Sylvester on looney tunes), Obama and all the rest of the empty headed morons running the country wrote the legislation, passed the legislation and now whine about bonuses being paid to retain people and for performance.

Let's do some math; $165 million divided by $150 billion equals .11%; aka ELEVEN TENTHS of a PERCENT people.

This is a true Yawner unless you are trying to cover the incompetence of the current administrations wasting the public treasury on Government largess.

My favorite Barnyism is his comment that they should fire all these managers. You just can't fabricate this level of stupidity folks. These are your LEADERS now.

I just love watching the American people reap what they have sown. It is fascinating watching the patients running the asylum. I am feeling wealthier and safer every freaking moment. :roll:
 
What a red herring this is.

Notice how Obama has already pardoned the CEO he appointed. So now we're going after all CEOs except for government-appointed CEOs. Nice.

This is a fabricated controversy designed to draw attention away from the tens of billions given to foreign banks.

Had AIG not been given any money, problem solved. Right? Natural business selection would have resulted, and AIG's competitors would have benefitted. No bonuses would have been paid, and no foreign banks would have been funded.

Most of those receiving bonuses are supposedly liberal proponents of Obama, too. I wonder how much "payback" is in this "stimulus"?
 
Erod said:
What a red herring this is.

Notice how Obama has already pardoned the CEO he appointed. So now we're going after all CEOs except for government-appointed CEOs. Nice.

This is a fabricated controversy designed to draw attention away from the tens of billions given to foreign banks.

Had AIG not been given any money, problem solved. Right? Natural business selection would have resulted, and AIG's competitors would have benefitted. No bonuses would have been paid, and no foreign banks would have been funded.

Most of those receiving bonuses are supposedly liberal proponents of Obama, too. I wonder how much "payback" is in this "stimulus"?
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Now you are onto something; it is called the "truth." :applaud
 
TOJ said:
Really? That your own personal opinion or do you have a source? .... thought so.
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You fail miserably.

Care to provide a legal document which provides the avenue for the government to legally give failed corporations billions of taxpayer $'s for doing nothing other than failing?...thought so, as this would require a change in the constitution.

Therefore, why would it be necessary to to find some legality in taking the money back?

Secondly, I did not understand your other comment about how if martial law (marshall law applied in Europe post-WWII) is being applied it wouldn't affect you. Either you do not pay taxes, as then some legal argument which would prevent the US govt from getting US taxmoney back wouldn't matter to you, or you don't live in the US and martial law wouldn't affect you. Of course, martial law isn't even on the radar (don't let that stop you from using the phrase), and the only other possibilitry is that you are receiving a bonus from AIG and therefore feel good that the American taxpayer is being taken for a sucker, giving you millions of bucks and all. And if that is the case, Obama should rape you.
 
Truth Detector said:
How amusing; Barney Franks (aka Sylvester on looney tunes), Obama and all the rest of the empty headed morons running the country wrote the legislation, passed the legislation and now whine about bonuses being paid to retain people and for performance.

Let's do some math; $165 million divided by $150 billion equals .11%; aka ELEVEN TENTHS of a PERCENT people.

This is a true Yawner unless you are trying to cover the incompetence of the current administrations wasting the public treasury on Government largess.

My favorite Barnyism is his comment that they should fire all these managers. You just can't fabricate this level of stupidity folks. These are your LEADERS now.

I just love watching the American people reap what they have sown. It is fascinating watching the patients running the asylum. I am feeling wealthier and safer every freaking moment. :roll:
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It's not a yawner to us liberals. You see, unlike you free-spending conservatives throwing billions down the holes all over the world, we care about where the money our govt spends goes.

When they agreed to take the billions of taxpayer dollars, they were doing so because failing to meet their obligations would have been a catastrophe on the world stage. However, they also need to confront the reality that without the bailout, all of these managers would be on the street as the company they were in charge of failed. Miserably.

Now, we have had years of neo-cons running govt and throwing money down the toilet hole faster than we can print more of it. Whether it's tens of thousands of guns disappearing in Iraq or the act of invading that nation itself, more money has been squandered in the last 8 years then any other similar period in the history of the planet.

So, please, I know this is going to be hard. But people, especially those running corporation which receive billions of taxpayer dollars, should be held accountable for every penny spent. Every single penny of taxpayer money should be spent on what they were not allocated for. As they were not given to allow these bonus's, they should be scrutinized. It's what a respectable government would do.

Which, I know, is hard for a neo-con to understand.
 
It seems there is a hunt for a scapegoat and AIG is it. Their bonuses are a matter of contractual law and go to reward the highly skilled experts to keep them at AIG and keep them from leaving for another firm.

And to those who say they aren't worth the bonuses if they got the company in such trouble, those folks are missing the point.

Excess & greed, not lack of skill, got them to this point.

Leave AIG's bonuses alone.

It's a legitimate cost of keeping the business in good running condition.
 
TOJ said:
You might want to take a look at the the US Constitution. I think there is something in there about making a law to cover past events. ;)
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I am not suggesting that laws be made to affect contracts retrospectively. What I am suggesting is that, this concept that contract law should trump ethical considerations is false. In part, many of the principles of contract law stem from classic liberal concepts. But I ask you this, do you think any classic liberal would support the performance of a contract, when the PRIVATE company has received huge Government bailouts?

Contract Law has slowly changed. We don't allow the enforcement of contracts to kill people even though the two parties involved may have consented and provided consideration. As far as I know many US state jurisdictions do not apply the doctrine of privity when the contract concerns insurance of third parties.

Therefore it is very apparent that contract law is not some ethically silent law, but rather it can change and evolve to take into account wider considerations.

So, my argument is this. I agree that you cannot retrospectively deny a persons contractual rights via statutory abrogation... But to just state that there is a contractual right, and that's the end of the argument, to me, strikes of legal positivism, and it ignores broader issues.
 
bhkad said:
It seems there is a hunt for a scapegoat and AIG is it. Their bonuses are a matter of contractual law and go to reward the highly skilled experts to keep them at AIG and keep them from leaving for another firm.

And to those who say they aren't worth the bonuses if they got the company in such trouble, those folks are missing the point.

Excess & greed, not lack of skill, got them to this point.

Leave AIG's bonuses alone.

It's a legitimate cost of keeping the business in good running condition.
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You seem to be placing an emphasis on the merit or the skills of these people, and not their actual value or performance that they bring to a firm.

If these experts were so brilliant why does AIG have to beg the US government for bailouts? Didn't the experts see the monster that was the sub-prime?

I don't know what business you would run, but I would not have contracts that reward mediocrity, and incompetence.

Secondly it was a lack of skill and excessive greed that got AIG into that position in the first place. Skill and greed are required to be successful in a capitalist system, greed by itself always ends in dramatic failure.

Where was the consulting skills of the 'experts'? Where was the analytical skills of the 'experts'? Why didn't they have the skills to predict that the Fed Reserve's monetary policy combined with governmental policy created a huge inflation of the money supply and a speculative bubble (respectively)? These so called experts are hacks.... Not worth the value that you give to them.

Thirdly you seem to be treating contractual law as if it lives in a world completely separate from the private sphere. Many of the concepts of contractual law developed in the 1800's when the UK and America experienced the greatest period of laissez faire development. There was very little government intervention in the private dealings of individuals and businesses. Thus the maximums and doctrines reflect this environment.

I'll put it this way, if government is willing to interfere with the workings of businesses, and businesses are willing to except these handouts; how can you then suggest that government respect contractual rights of parties? Laissez faire is not a compartmentalized concept. So if companies don't want their contractual rights interfered with, then they shouldn't except government bailouts.

You can't have it both ways. Consequently, this defence of AIG based on contractual law, ignores the reality that AIG doesn't actually believe in laissez faire principles, but rather is quite willing to beg for handouts when it fails.

Why should we allow men to have freedom to profit and freedom of contract if we do not hold them accountable to the inherent risks of their freedom? Capitalism becomes meaningless if we cannot differentiate between losses and profit.

Secondly, if governments bailout failing corporations, then governments should have every right to obliterate any private law obligations that the corporation has. As I've said, you can't have it both ways......
 
Joby said:
You fail miserably.

Care to provide a legal document which provides the avenue for the government to legally give failed corporations billions of taxpayer $'s for doing nothing other than failing?...thought so, as this would require a change in the constitution.

Therefore, why would it be necessary to to find some legality in taking the money back?

Secondly, I did not understand your other comment about how if martial law (marshall law applied in Europe post-WWII) is being applied it wouldn't affect you. Either you do not pay taxes, as then some legal argument which would prevent the US govt from getting US taxmoney back wouldn't matter to you, or you don't live in the US and martial law wouldn't affect you. Of course, martial law isn't even on the radar (don't let that stop you from using the phrase), and the only other possibilitry is that you are receiving a bonus from AIG and therefore feel good that the American taxpayer is being taken for a sucker, giving you millions of bucks and all. And if that is the case, Obama should rape you.
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Don't bother. Seriously. This is a friendly suggestion. :2wave:
 
Joby said:
You fail miserably.

Care to provide a legal document which provides the avenue for the government to legally give failed corporations billions of taxpayer $'s for doing nothing other than failing?...thought so, as this would require a change in the constitution.

Therefore, why would it be necessary to to find some legality in taking the money back?

Secondly, I did not understand your other comment about how if
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martial law (marshall law applied in Europe post-WWII)=
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Excuse me. English is not my first language.


is being applied it wouldn't affect you. Either you do not pay taxes, as then some legal argument which would prevent the US govt from getting US taxmoney back wouldn't matter to you, or you don't live in the US and martial law wouldn't affect you. Of course, martial law isn't even on the radar (don't let that stop you from using the phrase), and the only other possibilitry is that you are receiving a bonus from AIG and therefore feel good that the American taxpayer is being taken for a sucker, giving you millions of bucks and all. And if that is the case, Obama should rape you.
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I think you are the failure here unless you can explain under what authority he can make examples out of them as you suggest. You want him to take what they have earned under the employment contracts they signed in good faith and throw them in prision. Does the US President have the power to have anyone he does not like arrested and their property seized?

I have not defended the bailout but once the money was given without preconditions, it's too late. The government installed their own people in the BOD and the officiers of the company. These are the folks that made the determination that AIG was contractually bound to give the bonuses.

What does the amount of taxes I pay have to do with anything? You don't really think these people getting bonuses will make one dollar difference in the tax I pay, do you? Come to think of it, you probably are that naive.

As far as wishing for another DP member to be raped, is that proper in this forum? Maybe a mod could advise. Also, is Obama a rapist or are you just hoping he will become one for a special occasion?
 
Washington knew AIG was preparing to pay bonuses
WASHINGTON – Cue the outrage. For months, the Obama administration and members of Congress have known that insurance giant AIG was getting ready to pay huge bonuses while living off government bailouts. It wasn't until the money was flowing and news was trickling out to the public that official Washington rose up in anger and vowed to yank the money back.

Why the sudden furor, just weeks after Barack Obama's team paid out $30 billion in additional aid to the company? So far, the administration has been unable to match its actions to Obama's tough rhetoric on executive compensation. And Congress has been unable or unwilling to restrict bonuses for bailout recipients, despite some lawmakers' repeated efforts to do so.
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Joby said:
It's not a yawner to us liberals. You see, unlike you free-spending conservatives throwing billions down the holes all over the world, we care about where the money our govt spends goes.
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Yes, you "care about where the money our govt (takes and) spends goes"...
... into Democrat coffers.
REF.: See Freddie and Fannie.

In addition, Democrat policies turn people into the equivalent of crack whores, except in their case it's with tax payer (OPM) money.

It's not Liberty that Dems are seeking, it's power. Control.
To do that you have to control the money.

It's why we have a graduated income tax.
When Fed taxation began in 1916 it was for the wealthiest Americans only.
A fraction of a percent.

Now it's families that make 250,000.

Yes, you folks really care where the money goes.
You care too much.

Wish you wouldn't... we don't need a Mommy Dearest DC.

Now...

...Should Obama, Dodd and the rest return their bonuses with interest?
How about heaping some ridicule on these mobsters?
Senator Barack Obama received a $101,332 bonus from American International Group in the form of political contributions according to Opensecrets.org. The two biggest Congressional recipients of bonuses from the A.I.G. are - Senators Chris Dodd and Senator Barack Obama.
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Right Side Politics Examiner: Obama Received a $101,332 Bonus from AIG
 
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There is an editorial today from Edward Liddy in the Washington Post:

Our Mission at AIG: Repairs, and Repayment

I am mindful of the outrage of the American public and of the president's call for a more restrained compensation system. I am also mindful that every decision we make at AIG has consequences for the American taxpayer. We weigh decisions with one priority in mind: Will this action help or hurt our ability to pay money back to the government?

Although we have wound down more than $1 trillion in the portfolio of the AIG Financial Products unit that is at the root of the company's troubles, there remains substantial risk in that portfolio. The financial downside for taxpayers is potentially very large, and that's why we're winding down this business.

To prevent undue risk exposure in the meantime, AIG has made a set of retention payments to employees based on a compensation system that prior management put in place. As has been reported, payments were made to employees in the Financial Products unit. Make no mistake, had I been chief executive at the time, I would never have approved the retention contracts that were put in place more than a year ago. It was distasteful to have to make these payments. But we concluded that the risks to the company, and therefore the financial system and the economy, were unacceptably high.

Edward M. Liddy - Repairing AIG and Repaying the Public
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Bonus money is going to eleven people who no longer are employed there and billionsis going to overseas banks.
 
zimmer said:
...Should Obama, Dodd and the rest return their bonuses with interest?
How about heaping some ridicule on these mobsters?
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Since when is a political contribution considered a bonus??? :confused:

And tell me, when Dodd and Obama accepted these contributions, where they aware of the forthcoming trouble?

Of course not.
 
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